Global food costs have risen to a 10-year high, according to the United Nations Food and Agriculture Organization (FAO). Driven by poor harvests and supply issues, agricultural commodity prices rose sharply over the past year. The agency recorded a 10% increase in vegetable oil prices in October. Its index of vegetable oil prices was pushed up by rises in the cost of palm, soy, sunflower, and rapeseed oils. FAO’s cereal price index was up by more than 22% compared to the past year. Reduced harvests in major exporting countries – such as Canada, Russia, and the US have caused the price of wheat to skyrocket. “We’ve had pretty bad years [of harvests] in a lot of places,” says Peter Batt, an agribusiness expert at Curtin Business School.

Labor shortages, shipping disruptions, and factory closures are also contributing to the surge of production and transportation costs of food in other parts of the world. “The other problem that has emerged is getting the product out. For example, here in Australia, we’ve had a lot of ships arrive to take the food away, but we can’t get a crew to come in because of Covid.” Mr. Batt said. The cost of dairy products rose almost 16% over the last year. Brigit Busicchia from Macquarie University noted that soaring food prices are typically felt most acutely by the poor, as vulnerable households are pushed deeper into poverty and that this has the potential to raise social and political issues. “Expect countries like Egypt or other Middle Eastern countries to experience tensions in their provisioning of cereals,” she said.